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Plus I have another site which is about 600 pages indexed which had 1,200 backlinks before the update with a PR of 6 and now has 1,600 backlinks and drop to a PR of 5.
I am confused on what to do next...
Add more links or not!
Our competitors now have higher PR than us. They have many more, but lower quality links (link exchanges). They have started beating us out of the top of the SERPs. It's a bit of a disaster really.
So, take note GoogleGuy, we're going to hire a person full time to do link exchanges since we have no other option.
Pretty sad state of affairs I think.
The number of links outward from a page should count against the PR for that page. For instance page X has inward links from X Y and Z. It gets a PR based partly on those inward links. However it also has outward links.
The scale would work something like:
0 to 20 outwards, no penalty
20 to 50, -1 on PR
50 to 100, -2 on PR
100+, complete PR loss
This would really hit people who increasingly stuff pages with outwards links as part of "link exchange".
Respectfully disagree...
Sounds good, until one considers that there thousands of sites that legitimately offer 50-100 outbound links on certain pages. Examples include good directory sites, content sites with advertising and/or affiliate links...
Many of these kinds of sites are very useful to their user base...and one of the reasons the concept of "authority sites" exists.